Barbara Mikulski, longest serving woman in Congress, to retire

U.S. Senator Barbara Mikulski of Maryland, the top Democrat on the powerful Appropriations Committee and the longest-serving female to serve in Congress, announced today that she is retiring, according to media reports.

Mikulski, 78, said she would devote her final two years in Congress working for constituents in her mid-Atlantic state, not preparing to run for another term. “Do I spend my time raising money or do I spend my time raising hell?” she said at the news conference. “Remember, for the next two years, I will be here, working the way that I do.”

Mikulski was first elected to the House of Representatives in 1977. She has served in the Senate since 1987. The Baltimore native earned a reputation for toughness and fiery outspokenness during her five terms in Washington. She is one of 20 women in the Senate, according to the Center for American Women in Politics at Rutgers.

Considered one of the more liberal members of Congress, she opposed the invasion ofIraq. She also defended government spending in an era of austerity, saying in 2012 that Congress could be “frugal without being heartless.”

That year, NASA researchers in Baltimore discovered the glimmer of an exploding star, which they named “Supernova Mikulski” after the senator.

Fortune contributed to this report. This story was updated at 12:13 pm.

In wake of banking hacks, Senate will focus on finance industry security

In the aftermath of a massive hacking attack on several banks this summer, the Senate Banking Committee will hold a hearing on Wednesday about protecting the finance industry from cyber crime.

High-ranking federal officials from the Federal Bureau of Investigation, the Secret Service, the Treasury Department and the Department of Homeland Security are scheduled to appear. The meeting is expected to focus on ways that the various federal agencies can better coordinate with one another in their efforts to prevent and respond to cyber attacks in the financial sector.

Political leaders are focusing on the issue after news in August that hackers hit JPMorgan Chase JPM and several other banks in a massive cyber attack. JPMorgan later revealed that the attack compromised the accounts of 76 million households and 7 million small businesses, though the bank has said it has found no evidence of higher than normal instances of fraud or abuse of customer information.

The U.S. government concerned about cybersecurity in the financial sector, which it sees as a prime target for hackers looking to gain access to countless customers’ financial accounts and information. There has even been concern that such attacks could be state-sponsored, with the NSA Director Mike Rogers saying recently that foreign governments could back hackers in cyber espionage.

So far, the majority of high-profile data breaches have occurred in the world of retail, where companies such as Target TGT, Home Depot HD and Kmart have seen hackers gain access to tens of millions of customers’ information. Just last week, a cyber attack shut down the computer system at Sony Pictures Entertainment in an incident that led to numerous sensitive company documents being released to the web. Meanwhile, Bebe Stores became the latest business to suffer a cyber attack when the women’s retailer said this week it was hit by a data breach over a period of a couple of weeks last month.

The 2014 Midterms: A race that nobody won

Pundits called this midterm the Seinfeld election because, like the NBC sitcom, all its sound and fury signified not much. Voters agreed. They largely tuned out, concluding that those seeking office didn’t reflect their worries about the strength of the economic recovery. Politicians typically try to squeeze some wisdom about the popular will from the ballot results. But a confused campaign yields a muddled mandate. So don’t expect a consensus over a growth agenda to emerge from this mess.

We should probably state now that this issue of Fortune went to press before Election Day. There will be no shortage of ruminating about What It All Means once the verdict is in, but the depressing truth is that much of that is already knowable. Republicans notched their gains in both chambers of Congress by running against President Obama, not by pressing an affirmative vision of what they’d do as a party if handed the controls. “It’s only half the equation,” Republican pollster David Winston says, “and my viewpoint is that’s not enough.”

But even if candidates had rallied around specific plans for cutting through the morass—and from the business world’s perspective, there’s plenty that needs attention, from overhauls of our tax and immigration codes to new infrastructure spending—reality is primed to reassert itself in a hurry. Consider the tyranny of the congressional schedule, and it’s easy to see how only must-do items will move.

First comes the imperative to fundraise. On the heels of a record-breaking $4 billion election, the 23 Republican senators defending their seats in 2016 are rattling their tin cups already. For lawmakers it’s simple arithmetic: Three events a day netting a respectable $20,000 each, five days a week, amounts to $300,000 a week, or $15.6 million a year—seemingly a lot, but this year’s Senate races in Kentucky and North Carolina cost roughly $100 million each. “The fundraising treadmill never stops,” Republican lobbyist Rick Hohlt says.

The hustle for campaign cash erodes a schedule already shaved into three-day workweeks by lawmakers fleeing home to dodge the Washington stain. While Mitch McConnell, the Republican leader in the Senate, has pledged he’d keep the chamber humming during business days, the power of congressional chiefs to hold their members in town is limited. And they have a pile of deadline-driven work to cram into that shrinking window before they can contemplate any major reforms. Funding to keep the government open expires in December; borrowing authority to service our debt stops in March; a patch for Medicare payments to doctors comes due in April; and money for highway projects runs out in May. Since most bills will still need to clear the Senate’s 60-vote hurdle, “it’s very hard to see any big-ticket items passing next year,” one senior Democratic Senate aide says.

So as an election about nothing sets the stage for a similarly modest Congress, it may be smart to amend our expectations. “The best we could hope for would be no harm,” says Alan Krueger, the former chairman of President Obama’s Council of Economic Advisers. “That’s a reasonable outcome.”

Senate panel backs high frequency trading, and gets nowhere

The United States Senate took on high frequency trading and lost, I guess. Well, it didn’t win.

On Tuesday, the Senate Banking Committee held a hearing on the controversial trading practice. The hearing featured a number of boldfaced Wall Street names, including hedge fund titan and sometime-high-frequency-trader Ken Griffin; Jeff Sprecher, the head of the company that owns the New York Stock Exchange; and Joe Ratterman, the CEO of BATS, the stock exchange that is one of the chief “bad guys” featured in Michael Lewis’ recent book on HFT.

All of them said that high frequency trading is good for the market and should not be banned. The hearing contained no information to refute those facts.

Even Senator Elizabeth Warren took a shot and missed. Warren asked Griffin, just for context, how profitable his high frequency trading fund was. Griffin said he didn’t have a high frequency trading fund, which is technically true. He’s got a tactical fund that used to be all about high frequency trading but now is bigger and does a bunch of things, only one of which is high frequency trading. So it’s not solely a high frequency fund. Question deflected.

Griffin said we need high frequency trading to keep prices of exchange traded funds fair and accurate. But there have been lots of instances in which ETFs have been mis-priced. And shouldn’t making sure ETFs work be the job of BlackRock or others who rake in billions of dollars a year on such products?

There were even some swipes at Michael Lewis and his recent book Flash Boys, which vilified HFT. Griffin said the author had never spoken to him. Sprecher in a backhanded compliment said he admired IEX, the trading venue whose head Brad Katsuyama comes across as the hero of Lewis’ book. “I very much appreciate the IEX exchange, they have four order types,” Sprecher said. “I would love to get to four order types. They also have less than 1% market share.” The market, Sprecher was saying, has spoken, and they don’t want IEX.

All of the participants called for more disclosure of the fees that brokerage firms collect when they decide where to send their clients orders. They all agreed that there are too many places where stocks can trade, creating a potential for investors to get ripped off or for another so-called flash crash.

In fact, there seems to be a growing consensus from law makers and regulators, who are likely being guided by people like Sprecher and Griffin, that the real problem with the market is complexity; not lightning-quick trading that may or may not be picking investors’ pockets. Both Griffin and Sprecher said dark pools should be subject to the same regulations that exchanges are subject to. Sprecher says he would like to eliminate the fees that traders and brokers are paid to trade at one exchange over another.

All of those changes sound reasonable. But people who are likely to benefit the most from those changes are people like Sprecher and Griffin. The NYSE and trading venues like Griffin’s have to pay those fees. And, of course, Sprecher would like to go back to the days in which the market was simpler. Back then, the NYSE handled 90% of the trading volume.

Dark pools were formed, with different rules, in part because institutional investors thought they were not getting a good deal on exchanges. And there are “fair” dark pools, like IEX. But as Sprecher pointed out, no one trades there.

113th U.S. Congress: Unproductive? Or least productive ever?

This Friday, the 113th Congress will end its 2013 session with a less-than-distinguished title: one of the least productive ever.

Halfway through its term, Congress has passed 56 laws. By comparison, 10 years ago, the 108th Congress passed 504 laws between 2003 and 2004. A decade before, the 103rd passed 473 laws, according to GovTrack, a site that monitors legislation.

The current Congress’s predecessor, the 112th — thought to be the least productive ever — managed to pass 284. The 113th Congress is on track to underperform even that cohort.

The anemic legislative output is brought to you by an unprecedented confluence of divided government, partisan polarization, and bicameral policy differences.

“If we look back five or six decades, these are the forces that have mired Congress in a stalemate,” says Sarah Binder, a professor of political science at George Washington and a senior fellow at the Brookings Institution who studies Congressional gridlock. “And they’ve all come to a head in this Congress.”

A divided government doesn’t automatically hinder lawmaking. In 1986, for instance, Republicans controlled the Senate, and Democrats held the House yet it still managed to pass comprehensive immigration reform.

But in the 113th, the divided government hurdle has been exacerbated by partisanship and disagreement between chambers that have reached new extremes. In the 1960s and ’70s, the average Democrat was just left of center and the average Republican was just to the right, says Binder, who has studied Congressional voting records. Today, thanks in part to the evolution of the South, conservative Democrats and moderate Republicans are all but extinct, says Binder. That has set the stage for not just ideological differences between the parties over the proper role of government, but strategic ones that cause one party’s members to disagree with the other’s simply out of fear of angering their voter base.

“If that’s the landscape, it’s really hard to legislate,” Binder says. And should a bill slip through the partisan cracks, it’s often dead on arrival in the other chamber. “There are always differences between chambers — big and small,” says Binder. “In this Congress, they’re huge. “

Short of enrolling all 535 members of Congress in group therapy (we’d pity the shrink), there are some possible remedies.

Redistricting and open primaries are often suggested as ways to produce more moderate voters, but that wouldn’t necessarily produce more moderate candidates, says Binder. And making it easier for members to negotiate in private prior to a bill’s announcement could also help, though so-called sunshine rules passed in the 1970s require Congress to do most of their work in public and the media and constituents expect as much. Fast-tracking legislation — a process often employed with free trade agreements where members of Congress agree to pass an initiative in its entirely or not at all — could also result in more laws, though neither party — at this point — is willing to give up the ability to amend legislation.

Heidi Gardner, professor of business administration at Harvard Business School, offers a more theoretical suggestion that starts with trust, which, she says, is “an absolute precondition of collaboration.” To work well with another person, Gardner says, you have to believe that they are intelligent and that their intentions are pure — the sort of trust that, in Congress’s case, would sprout from relationships formed away from the negotiating table and out of the limelight.

With that prerequisite met, there’s a better chance that members of Congress would work for the collective — the nation, in this instance — instead of focusing only on their own goals.

That sort of high-minded strategy has worked in smaller, more independent groups. For example, Gardner studied the structural changes put in place at the Dana Farber Cancer Institute that encouraged scientists who normally competed against one another for lab space, grants, and tenured professorships to work together. The result was highly personalized oncology treatments.

Ideally, Congress should tackle the big issues by coming to a cliff on an issue, holding hands, and jumping together. “That would insulate them all from public blame,” says Binder. But in such a polarized climate, Binder says, “the incentive now is to come to the cliff and push the other party over the edge.”